As the bitcoin market crashes, the Crypto startup Amber Group is reducing expenses and employees across the board.
Reports are circulating that the company has reduced its Hong Kong headcount by half to 40 people, eliminating positions in tech, risk management, audit, and compliance.
Layoffs
Amber was established in Hong Kong in 2017 and is funded by significant investors, including Sequoia Capital China and Temasek Holdings.
According to South China Morning Post (SCMP), sources said the firm had reduced its compliance team from more than 20 to less than five personnel worldwide in recent months. The insider also revealed that the company had laid off its entire internal audit staff.
Amber told SCMP that it is anticipating and preparing itself for an extraordinarily cautious approach, even if it means going back to basic business foundations throughout the moment.
The firm's Hong Kong branch had more than 100 staff in headcount and was operating as usual.
While the firm is trying to cut expenses amid the crypto market upheaval caused by the demise of various platforms recently, including stablecoins Terra Luna in May 2022 and crypto exchange FTX in November 2022, warning flags are beginning to appear.
On Twitter, Amber said that the amount of money still on the exchange was less than 10% of its trading capital. However, the true extent of the loss is yet unclear.
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More Cost-cutting Measures
It is reported that Amber had relocated its Hong Kong headquarters from the city's Central business district to a more cost-effective location in Causeway Bay. Allegedly, it had fallen behind on payments to third-party vendors such as technology service providers, recruitment firms, and consultants by as much as six months.
Bloomberg claims that in addition to massive layoffs, Amber will also be closing its retail division WhaleFin and ending its sponsorship agreement with the English football club Chelsea FC.
A letter of agreement reviewed by the SCMP this month details a pay reduction program called "Primary Share Units."
This initiative was unveiled in October 2022 by Amber Group, which invited workers to subscribe to business stocks at $1 per share. The value of which is taken from their monthly paycheck.
Persistence
Despite the worldwide fallout from FTX's failure, Amber managing partner Annabelle Huang tweeted last December that withdrawals were open as usual and that business was operating normally.
Amber's chief executive officer Wu told Bloomberg last month that the company would be one of the few significant crypto services firms left in 2023.
The company secured $300 million in a fresh investment round headed by Fenbushi Capital US on December 16, 2022. This value is lower than the previous round's $3 billion.
Based on what Wu told Bloomberg, the money would be distributed to those who had invested in Amber and subsequently lost money when the FTX collapsed.
